Douglas Branson on Conflicts of Interest Between Not-for-profit Entities

Published September 24, 2014

Professor Douglas Branson explained conflicts of interest in not-for-profit entities, specifically a charter school, in the September 4 edition of the Pittsburgh Post-Gazette. The case involved a non-profit which owned real estate and leased it to a second non-profit for use as a charter school. The two corporations shared several directors (interlocking directorates). Professor Branson explained that, in such a case, regardless of the amount involved or apparent fairness of the transaction, proper treatment requires full disclosure, decision-making by only the disinterested directors, and credible findings of why the proposed transaction might be deemed fair to each corporation.